Living Trusts

A complete estate plan should include four important estate planning components: a trust, a will, a Durable Power of Attorney, and an Advance Healthcare Directive.

If you are exploring options for protecting your growing family, or if you have assets that you’re looking to protect, look no further than creating a living trust.

Every situation is unique, but all people face these questions at some point in their lives.

  • Do I have something or someone to protect?
  • Does my family know all of my wishes if something happened to me?
  • Is my property protected from probate?

Build Your Living Trust Today!
We are here to help you protect the things you care about most. Whether you are just looking into options or know exactly how you want to plan your estate, we can assist you in creating your living trust.

What is a Living Trust?

A living trust is a legal document created by a settlor(s) through which the settlor(s) appoints another person, or themselves, during their lifetime and/or an institution, such as a bank, to manage the assets of their trust. They would do so holding title to the trust assets as a trustee. A trustee holds the legal title or inheritance to assets including property for the settlor(s) for the benefit of another person, called a beneficiary. A beneficiary is someone who will be receiving a distribution of an asset or assets after the settlor(s) is deceased. The instructions under which the trustee operates are written out in the trust. There are many advantages to establishing a trust other than for distribution of assets after you die. Below are some other important advantages to know before you create a living trust.

How Can a Living Trust Help Me?

  • Probate Avoidance

    Upon the death of the settlor, the trust either continues for new beneficiaries or terminates, depending on the terms of the trust. In either case, this occurs without requiring the lengthy probate process. This can save time and money for the beneficiaries.

  • Management during incapacity

    During incapacity of the settlor, the instructions and authority in the trust provides the trustee to act on behalf of the incapacitated settlor and continue the management of the settlors assets.

  • Tax Savings

    Certain trusts can create estate tax advantages both for the settlor and the beneficiary before and after death.

  • Asset protection

    Certain provisions in the trust may be used to protect property from creditors or undue influence. This language can also help protect your beneficiaries from lawsuits or divorce to ensure. 

  • Privacy

    Unlike wills, trusts are private documents, and only those individuals with a direct interest in the trust have any right to know of trust assets and distributions.

  • Durability

    Provided they are well-drafted, another advantage of living trusts is their continuing effectiveness after the settlor dies or becomes incapacitated.

Are There Different Kinds of Trusts

Revocable Trusts

Revocable trusts give the settlor(s) complete control over the trust. He or she may amend, revoke, or terminate the trust at any time. The settlor(s) can take back the funds he or she put in the trust or change the trust’s terms. Therefore, the settlor(s) can reap the benefits of the trust arrangement while maintaining the ability to change the trust at any time prior to death. Revocable trusts are generally used for the following purposes:

  1. Asset management. They permit the trustee to administer and invest the trust property for the benefit of one or more beneficiaries of the trust.
  2. Probate avoidance. At the death of settlor,the trust property passes to whomever is named in the trust. It does not come under the jurisdiction of the probate court and its distribution need not be held up by the probate process. However, the property of a revocable trust will be included in the settlor’s estate for tax purposes.
  3. Tax planning. While the assets of a revocable trust will be included in the settlor’s taxable estate, the trust can be drafted so that the assets will not be included in the estates of the beneficiaries, which helps avoid taxes after they die.
  4. Disability planning. Wills only provide for death, living trusts can help a person have a plan in place in the event of their own illness or incapacity.

Irrevocable Trusts

An irrevocable trust cannot be changed or amended by the settlor(s) unless there are specific provisions to do so. Any property placed into the trust may only be distributed by the trustee as provided for in the trust document itself. For instance, the settlor may set up a trust under which he or she will receive income earned on the trust property, but the trust bars access to the trust principal. This type of irrevocable trust is a popular tool for long-term care planning. In addition, irrevocable trusts are often used with life insurance policies as an estate tax planning device.

Testamentary Trusts

A testamentary trust is a trust created by a will. Such a trust has no power or effect until the will of the settlor is probated. Although a testamentary trust does not avoid the need for probate, and becomes a public document as it is a part of the will, it can be useful in accomplishing other estate planning goals. For example, the testamentary trust can be used to provide funds for a surviving spouse that would be protected if she required Medi-Cal assistance for nursing home care, an option that is not available using a revocable or living trust.

Why Copenbarger & Copenbarger LLP?

The process of making sure you have the legal protections in place. To make sure you your family, and your financial resources are properly protected. This requires you to help the attorney determine what are the most important areas of your life to secure. It involves asking the what if questions of life. What if I become disabled, what if I did, what if my spouse becomes disabled, what if they die, what if my children are unable to take care of themselves when I become disabled or die.